Union relations sorely tested

A partnership came close to breakdown at utility company Hyder after it had to make 1,000 staff redundant, head of employee relations Colin Thomas told delegates.

Faced with a range of problems including a windfall tax of £282m and the collapse of its share price, Hyder senior managers began to question the commitment to non-compulsory redundancies.

Thomas said, “We had anticipated many of these problems, but perhaps not the scale of them. Some of my colleagues were starting to say that the policy of voluntary redundancies could not be maintained.”

Thomas said Hyder’s partnership arrangement with Unison began in 1989 and resulted in white and blue collar distinctions being swept away.

But he said partnership began to break down under intense pressure last year when both senior management and union figures started to question it.

Brian Wallis, Unison senior regional officer, described the episode as a “horror story”.

He said the chief executive gave a development team, including senior HR staff, three months to come up with solutions avoiding the need to “revert to type”.

He said, “The problems were immense and they were given no leeway.”

As a result, staff were offered voluntary redundancy, although the payments were 50 per cent lower than normal. “The 1,000 job losses were achieved and every single redundancy was voluntary.”

Other measures put in place to cut costs by £40m by April 2000 included the abolition of meal subsidies, monthly pay for all and a pay freeze.

But Thomas said Hyder was by no means out of the woods.

In April, the board recommended shareholders accept a bid from Nomura to buy Hyder.

A month later Western Power, supported by United Utilities, launched a counterbid that could result in the break up of the company.

Thomas added, “There is no doubt that partnership in Hyder has come under serious pressure in the past year and there is still the possibility of challenge.”